CHICAGO--(BUSINESS WIRE)--High-yield bond issuance reversed the trend of quarter over quarter
declines as noted in Fitch Ratings' new 'U.S. Leveraged Market
Quarterly' report. Refinancing related issuance continued to be the
predominant use of proceeds.

The trailing 12-month (TTM) U.S. high yield default rate ended June at
2.7%. High-yield bond issuance for second-quarter 2014 totaled $73.3
billion, up by 17% from the first-quarter 2014. The energy sector saw
the most issuance in the quarter at 30.1%, followed by the business
services sector at 10.6%.

The TTM U.S. leveraged loan default rate was up to 4% in June from 1.6%
at year-end 2013. Second-quarter 2014 leveraged loan issuance was down
at $244 billion from first-quarter 2014's issuance of $276 billion and
well below second-quarter 2013's and first-quarter 2013's issuance of
$354 billion and $307 billion, respectively.

$36.9 billion of notes and equity were issued by 65 U.S. CLOs in the
second quarter, making the quarter the most active for new CLO issuance
on record. New issue stated spreads on senior notes averaged 147 basis
points (bps) over Libor compared with 150 bps over Libor in
first-quarter 2014. Credit enhancement for senior notes remained stable
at an average of 37.5%.

This quarter's report, Fitch's 'U.S. Leveraged Market Quarterly,' also
highlights the recent developments in Emerging markets and the U.S.
Retail sector.

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